Hello all, I have a scenario caused by an employer changing from T Rowe Price to Fidelity in the midst of QDRO submissions. The Stipulated Judgment of Dissolution specifies a Valuation date of 10/23/20 and my account contained only pretax contributions on that date. Fidelity won’t accept any Valuation date prior to 12/29/2023 since that’s when their record keeping started. My first Roth contribution date was 2/24/23 with TRP and then an in plan Roth conversion was completed prior to Fidelity takeover 12/29/23. All payroll contributions since 2/24/23 have been Roth. Fidelty’s QDRO guidance allows for USE of a valuation date prior to 12/29/23 but states adjustment to the award should occur utilizing TRP statement. They state the valuation date must be 12/29/23 or the QDRO won’t be qualified.
A motion to vacate the QDRO was filed in February 2024 with due diligence after the judge signed the invalid QDRO. The award was not adjusted for the valuation date Fidelity required. The motion to vacate STILL hasn’t been heard. This resulted in the AP account segregation on 3/4/24. All Roth contributions I made including the in plan Roth conversion were treated as marital property resulting in a Roth tax cost basis being assigned to my Ex when he should have NONE. Fidelity backed out all Roth from his award as of the 12/29/23 valuation date and ignored my prior non-marital Roth contributions that started 2 years post dissolution and 18 months after the 10/23/20 stipulation of Valuation date.
How would the calculation work to “adjust” his flat award amount (no gains/losses)? Does he just keep the Roth tax cost basis, which is a loss to me? Are we to calculate the income tax savings he received as a dollar amount and then subtract that from his award? Would any individual IRS amendment be necessary for either party?
Fidelity’s valuation date mess suggests the state court violate 2 stipulated orders, one stating valuation date and another stating the flat dollar amount of his award.
I’m doubtful that Fidelity would even get involved due to the court’s extended delay.
After 5 QDRO attempts, all being incorrect, the judge has even imposed judgement interest on the total award amount and atty fee reimbursement for my objections! Wouldn’t this be an ERISA violation as well since a VALID QDRO IS REQUIRED for the award to be made? another motion to vacate was filed for that as well.
Thanks in advance for any thoughts on this matter!
